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Presentation Title | 8Overview | 8 Proprietary and Confidential Transacting assets with a value in excess of $10 billion since 2008.

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Presentation Title | 9Overview | 9 Proprietary and Confidential Presentation Title | (c) PharmaVentures Ltd. PharmaDeals The PharmaDeals website is a one-stop portal for all the latest deals and alliance news and analysis in the healthcare industry

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Presentation Title | 25Overview | 25 Proprietary and Confidential ~12% of options are exercised within first 2 years Options exercised? Yes No Time to exercise: <1 yr 1-2 yrs >2 yrs Top 20 pharma Most are based on preclinical deals

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Presentation Title | 26Overview | 26 Proprietary and Confidential But who feels most confident in negotiation?

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Presentation Title | 30Overview | 30 Proprietary and Confidential In M&A what are Contingent Value Rights (CVRs)? A type of right given to shareholders of an acquired company that ensures they receive additional benefit if a specified event occurs. A contingent value right is similar to an option because it often has an expiration date that relates to the time the contingent event must occur.

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Presentation Title | 32Overview | 32 Proprietary and Confidential M&A transaction structures becoming more complex Longer term contracting back of services: –Acquisition of Sanofi R&D sites by Covance Upfront cash payment Contracting back of clinical development services for up to 10 years Up to $2.2bn in value –Acquisition of UCB manufacturing sites by Aesica Upfront cash payment Contracting back of manufacturing services ******PharmaVentures acted as advisor and broker to Sanofi and UCB

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Presentation Title | 33Overview | 33 Proprietary and Confidential The risk game - lessons Pharma reduced risk by in-licensing R&D 30 years ago Deal values appear to recovering but ….. Options within licenses and CVRs reduces risk further for licensee/buyer Pharma will generally only in-license quality assets at POC Quality assets always command highest prices/values Value is also determined by negotiating power of the parties The risk adverse state of VC funding has effected negotiating power Pharma is trying to adapt to a more risk adverse VC environment through corporate venture funds but also to remain competitive Pharma are looking to increase university collaborations

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Presentation Title | 34Overview | 34 Proprietary and Confidential “You have to start with the customers experience and work backwards to the technology – you can’t start with the technology” - Steve Jobs, 1997 How to survive!

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Presentation Title | 35Overview | 35 Proprietary and Confidential How to survive (1) – your company - your IP Develop technology/drugs that are truly disruptive and to future pharma needs Carefully consider pricing and re-imbursement issues Fund using grants and other sources of non-dilutive capital Only bring in well networked committed VCs who can sustain multiple rounds of financing Quality assets always command highest prices/values Value is also determined by your negotiating power – strong backers Go early to talk to pharma to establish issues

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Presentation Title | 36Overview | 36 Proprietary and Confidential How to survive (2) – big pharma Technology is always sexy but truly understand what pharma really want Pharma are your customers – so get to know them After all Pharma are likely to be your licensees or buyers Pharma like options within licenses as they reduce risk further Pharma prefer to in-license quality assets at POC And quality assets always command highest prices/values Pharma is trying to adapt to a more risk adverse VC environment through corporate ventures but also to remain competitive

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Presentation Title | 37Overview | 37 Proprietary and Confidential How to survive (3) – The Exit Plan your exit from the beginning Forget IPO for the time being unless you are profitable! Trade sale most likely, so get to know your potential buyers What do your buyers want? “You have to start with the customers experience and work backwards to the technology – you can’t start with the technology” - Steve Jobs

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Presentation Title | 38Overview | 38 Proprietary and Confidential What Pharma Execs said to me on PharmaTelevision - an NZ Opportunity? “We are interested in innovation and in new ideas as they come out of universities” - James Sabry, Vice President of Partnering Genentech, Inc “The goal is to put our R&D organization closer to academia, closer to where the science is happening” – Doug Giordano, Vice President, Worldwide Business Development Group, Pfizer, Inc “There is an ever increasing awareness that the majority of science is out there and we need to interact with academia” – David Nicholson, Senior Vice President Worldwide Licensing and Knowledge Management, Merck & Co, Inc “We've been much more aggressive now and going and cutting partnerships with academia, foundations, institutions, non-profit organizations” - Rob Wills, Vice President, Alliance Management, Johnson & Johnson

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Presentation Title | 39Overview | 39 Proprietary and Confidential NBI has out performed Nasdaq Index